Apple says iPhone supplies hurt by anti-COVID restrictions in China

Apple is warning customers that they will have to wait a long time to get their latest iPhone models after anti-virus restrictions were imposed at a contractor’s factory in central China.

The company’s announcement on Sunday gave no details, but said the Foxconn-run factory in the central city of Zhengzhou was “operating at a significantly reduced capacity.”

“We now expect lower-than-expected iPhone 14 Pro and iPhone 14 Pro Max shipments,” the company said. “Customers will experience longer wait times to receive their new products.”

Foxconn Technology Group previously said it had imposed anti-virus measures at the factory in Zhengzhou following the virus outbreak. Apple and Foxconn had previously not responded to questions about how iPhone production could be affected. Last week, access to the industrial area was suspended for a week following a surge in infections and workers leaving the factory in Zhengzhou.

The lockdown is expected to cause further disruption at the plant, which has seen coronavirus infections and an exodus of workers in recent weeks, some of whom have fled the factory on foot.

“gut punch”

“After battling macro headwinds and delivering a strong September quarter/guidance unlike the rest of Big Tech, this latest zero COVID situation is an absolute gut punch for Apple in its most important holiday quarter ever,” Wedbush analysts said in a statement. report good.

“If Zhengzhou remains at low capacity over the next few weeks, it will explain the lack of iPhone Pro in the all-important Christmas time period, especially in the US,” he said.

Foxconn said in a statement that it is revising its outlook for the quarter due to the lockdown.

“Foxconn is now working with the government to stamp out the pandemic and resume production at its full capacity,” the company said on Monday.

It also said the provincial government said it would “fully support” Foxconn in managing the plant’s epidemic prevention and operating conditions.

In a post on the Zhengzhou plant’s WeChat social media account on Sunday, the company said a “closed loop” system would restrict the travel of its workers between their dormitories and the factory area to manage the risks of COVID-19 transmission .

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The last quarter of the year is typically a busy season for companies like Foxconn as they ramp up production ahead of the year-end rush.

“We are working closely with our suppliers to return to normal production levels while ensuring the health and safety of every employee,” Apple said.

While other big technology companies have struggled As the economy slows this year, Apple has proved more resilient. Its fiscal fourth-quarter revenue rose 8% from the same period last year to $90.1 billion, while its profit jumped nearly 1% to $20.72 billion.

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